Newsweek.com carries an interview with Safeway CEO Steve Burd, in which he addresses the nation’s health care crisis. Excerpts:
• “Many Americans are looking for a quick fix. If I can take a pill or have a stent rather than change my lifestyle, that sounds easier. As I talk with policy makers, only a few seem to really understand the role of behavior in health-care costs. Most policy makers believe that solving the coverage problem is going to cost an enormous amount of money and that’s why it hasn’t been dealt with. Even people who thought behavior mattered believed that you had to make a big investment today and wait five to 10 years to begin experiencing the savings. The big surprise is that’s not the case.
“When we redesigned our health plan to reward people for healthful behaviors and prevention—such as an annual physical, a colonoscopy, regular mammograms, to name just a few, if you’re diabetic you control your blood sugar, if you’re overweight, you make a commitment to lose those extra pounds—those behavioral changes will clearly affect your health, clearly affect your longevity, and lower your costs and our costs.”
• “We saved 15 percent of our health-care costs the first year, flattened our costs the second year and rewarded our employees with a premium reduction of 25-34 percent. We’ve been paying for 100 percent of preventive care. But if you’re not getting annual physicals, then you’re not going to gain a financial incentive, so effectively your insurance premium with us will go up. It’s not just that we suggest you do this; there’s a strong financial incentive for you to behave in your own best interests. And, we continue adding incentives in our health-care plan. As a result, we believe that we can continue to improve the quality of care for our employees, make them healthier with some of our wellness programs, and in fact, continue to drive costs down.”
• “I think there’s a natural alliance between business and labor on this issue, and there’s been a sea change. This is clearly a nonpartisan issue. The reason business is getting engaged is that costs are rising and it’s affecting global competitiveness. Labor leaders are engaged in this issue because health-care cost increases are eating away at their ability to get wage increases. Last year alone, health-care cost increases explained 50 percent of the rise in the consumer price index.
“While we must always be competitive, I’m now advocating, along with union leaders, that we fundamentally change the rules of the game. That will not only drive health-care costs down and get everyone covered, but it will also improve the competitive landscape. When I talk to business leaders, I have yet to find a CEO who doesn’t agree with the notion that everyone should be insured. That was not true 10 years ago.”
• “Besides helping our employees to stay healthy, we’re helping our customers identify foods that are particularly healthy for them to eat. Some of the healthiest foods are unbranded fruits and vegetables, so we’ve put signs in our produce section with notes from you, such as, ‘Did you know that these tomatoes are high in lycopene, which may reduce your risk of breast cancer and prostate cancer?’ ‘Did you know that these blueberries may improve your memory?’ You’re our field guide. I envision a day when insurance companies give families discounts on their insurance for eating healthier foods.
“There’s no question that this problem is going to get solved if we address the root causes. Rarely in a lifetime does a problem this big, this complex, surface that you can sit around a water cooler and say: you know, we can solve this one. Prevention and behavior matter. They are the Holy Grail of a health-care solution.”
• “Many Americans are looking for a quick fix. If I can take a pill or have a stent rather than change my lifestyle, that sounds easier. As I talk with policy makers, only a few seem to really understand the role of behavior in health-care costs. Most policy makers believe that solving the coverage problem is going to cost an enormous amount of money and that’s why it hasn’t been dealt with. Even people who thought behavior mattered believed that you had to make a big investment today and wait five to 10 years to begin experiencing the savings. The big surprise is that’s not the case.
“When we redesigned our health plan to reward people for healthful behaviors and prevention—such as an annual physical, a colonoscopy, regular mammograms, to name just a few, if you’re diabetic you control your blood sugar, if you’re overweight, you make a commitment to lose those extra pounds—those behavioral changes will clearly affect your health, clearly affect your longevity, and lower your costs and our costs.”
• “We saved 15 percent of our health-care costs the first year, flattened our costs the second year and rewarded our employees with a premium reduction of 25-34 percent. We’ve been paying for 100 percent of preventive care. But if you’re not getting annual physicals, then you’re not going to gain a financial incentive, so effectively your insurance premium with us will go up. It’s not just that we suggest you do this; there’s a strong financial incentive for you to behave in your own best interests. And, we continue adding incentives in our health-care plan. As a result, we believe that we can continue to improve the quality of care for our employees, make them healthier with some of our wellness programs, and in fact, continue to drive costs down.”
• “I think there’s a natural alliance between business and labor on this issue, and there’s been a sea change. This is clearly a nonpartisan issue. The reason business is getting engaged is that costs are rising and it’s affecting global competitiveness. Labor leaders are engaged in this issue because health-care cost increases are eating away at their ability to get wage increases. Last year alone, health-care cost increases explained 50 percent of the rise in the consumer price index.
“While we must always be competitive, I’m now advocating, along with union leaders, that we fundamentally change the rules of the game. That will not only drive health-care costs down and get everyone covered, but it will also improve the competitive landscape. When I talk to business leaders, I have yet to find a CEO who doesn’t agree with the notion that everyone should be insured. That was not true 10 years ago.”
• “Besides helping our employees to stay healthy, we’re helping our customers identify foods that are particularly healthy for them to eat. Some of the healthiest foods are unbranded fruits and vegetables, so we’ve put signs in our produce section with notes from you, such as, ‘Did you know that these tomatoes are high in lycopene, which may reduce your risk of breast cancer and prostate cancer?’ ‘Did you know that these blueberries may improve your memory?’ You’re our field guide. I envision a day when insurance companies give families discounts on their insurance for eating healthier foods.
“There’s no question that this problem is going to get solved if we address the root causes. Rarely in a lifetime does a problem this big, this complex, surface that you can sit around a water cooler and say: you know, we can solve this one. Prevention and behavior matter. They are the Holy Grail of a health-care solution.”
- KC's View:
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We’d like to believe that organized labor shares Burd’s commitment to changing the health care equation, but we suppose that the ongoing negotiations in Southern California will tell us all more about that.
While we’re open-minded about the route, it seems to us that the destination is inevitable – that prevention and behavior and accountability must be a part of any successful approach to health care.
